NEW YORK, Nov. 19, 2008 (GLOBE NEWSWIRE) -- The Boards of Trustees of PIMCO High Income Fund (NYSE:PHK), PIMCO Floating Rate Income Fund (NYSE:PFL) and PIMCO Floating Strategy Fund (NYSE:PFN) (each, a "Fund" and collectively, the "Funds") today announced each Fund will redeem, at par, a portion of its auction rate preferred shares ("ARPS"), beginning December 8, 2008 for PHK and PFN and December 10, 2008 for PFL and concluding on December 12, 2008 for all Funds.
As previously communicated in the press releases dated November 3 and November 7, 2008 and in accordance with the Investment Company Act of 1940, as amended and each Fund's By-laws, a Fund is not permitted to pay or declare common share dividends unless the Fund's ARPS have a minimum asset coverage of 200% ("200% Level") after payment or declaration of the common share dividend. Due to current market dislocations, the values of the Funds' portfolio securities have declined and caused the Funds' asset coverage ratios to fall below the 200% Level.
The decision to redeem a portion of the Funds' ARPS was made at the recommendation of the Funds' managers and is intended to increase asset coverage of the Funds' ARPS above the 200% Level (subject to future market conditions), permitting the Funds to pay the previously declared common share dividend and declare common share dividends for November and December. An announcement regarding actual dividend payment and declarations dates will be made at a future date.
Each Fund intends to redeem the following amount of ARPS per Series, at their full liquidation preference of $25,000 per share plus accumulated but unpaid dividends, up to their respective dates of redemption:
PIMCO High Income Fund (PHK)
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Redemption Amount
as a % of
Outstanding ARPS
Series Redemption Date Redemption Amount in that Series
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Series M $63,000,000
(CUSIP: Dec. 9, 2008 (2,520 shares 35%
722014206) x $25,000)
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Series T $63,000,000
(CUSIP: Dec. 10, 2008 (2,520 shares 35%
722014305) x $25,000)
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Series W $63,000,000
(CUSIP: Dec. 11, 2008 (2,520 shares 35%
722014404) x $25,000)
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Series TH $63,000,000
(CUSIP: Dec. 12, 2008 (2,520 shares 35%
722014503) x $25,000)
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Series F $63,000,000
(CUSIP: Dec. 8, 2008 (2,520 shares 35%
722014602) x $25,000)
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$315,000,000
Total (12,600 shares
x $25,000)
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PIMCO Floating Rate Income Fund (PFL)
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Redemption Amount
as a % of
Outstanding ARPS
Series Redemption Date Redemption Amount in that Series
---------------------------------------------------------------------
Series T $25,000,000
(CUSIP: Dec. 10, 2008 (1,000 shares Approx. 35.7%
72201H207) x $25,000)
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Series W $25,000,000
(CUSIP: Dec. 11, 2008 (1,000 shares Approx. 35.7%
72201H306) x $25,000)
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Series TH $25,000,000
(CUSIP: Dec. 12, 2008 (1,000 shares Approx. 35.7%
72201H405) x $25,000)
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$75,000,000
Total (3,000 shares
x $25,000)
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PIMCO Floating Rate Strategy Fund (PFN)
---------------------------------------------------------------------
Redemption Amount
as a % of
Outstanding ARPS
Series Redemption Date Redemption Amount in that Series
---------------------------------------------------------------------
Series M $39,000,000
(CUSIP: Dec. 9, 2008 (1,560 shares Approx. 40.6%
72201J500) x $25,000)
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Series T $39,000,000
(CUSIP: Dec. 10, 2008 (1,560 shares Approx. 40.6%
72201J203) x $25,000)
---------------------------------------------------------------------
Series W $39,000,000
(CUSIP: Dec. 11, 2008 (1,560 shares Approx. 40.6%
72201J302) x $25,000)
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Series TH $39,000,000
(CUSIP: Dec. 12, 2008 (1,560 shares Approx. 40.6%
72201J401) x $25,000)
---------------------------------------------------------------------
Series F $39,000,000
(CUSIP: Dec. 8, 2008 (1,560 shares Approx. 40.6%
72201J609) x $25,000)
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$195,000,000
Total (7,800 shares
x $25,000)
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The Funds are partially redeeming their ARPS on a pro rata basis by Series. The Depositary Trust Company ("DTC"), holder of record of the ARPS, determines how the redemption will be allocated among each participant broker-dealer account that holds ARPS and each participant broker-dealer determines how to allocate each redemption among the beneficial holders of the ARPS held by it. The procedures used by participant broker-dealers to allocate redeemed ARPS among their clients may differ from each other and from the procedures used by DTC.
PHK's investment objective is to seek high current income. Capital appreciation is a secondary objective. PFL's and PFN's investment objective is to seek high current income, consistent with the preservation of capital. There can be no assurance that the Funds will achieve their stated objectives.
Allianz Global Investors Fund Management LLC, an indirect, wholly-owned subsidiary of Allianz Global Investors of America L.P., serves as the Funds' investment manager and is a member of Munich-based Allianz Group (NYSE:AZ). Pacific Investment Management Company LLC, an Allianz Global Investors Fund Management affiliate, serves as the Funds' sub-adviser.
The Funds' daily New York Stock Exchange closing prices and net asset values per share are available by calling the Funds' shareholder servicing agent at (800) 331-1710. This information, as well as updated portfolio statistics and performance, is available at http://www.allianzinvestors.com.
Statements made in this release that look forward in time involve risks and uncertainties and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such risks and uncertainties include, without limitation, the adverse effect from further declines in the securities markets and in the Funds' performance, a general downturn in the economy, inability to obtain leverage to replace ARPS that have been redeemed, competition from other companies, changes in government policy or regulation, inability to attract or retain key employees, inability to implement its operating strategy and/or acquisition strategy, and unforeseen costs and other effects related to legal proceedings or investigations of governmental and self-regulatory organizations. The Funds' ability to maintain leverage and to pay dividends to common shareholders is subject to the restrictions in their registration statements, by-laws and other governing documents.